Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

NOTE: This information was provided to the committee by USACE in the public interest after the public release of this report and was not reviewed for accuracy by the National Academies of Sciences, Engineering, and Medicine.

This Status of Implementation of Asset Management is primarily focused on inland navigation lock and dam projects consistent with the main focus of this report. The risk-informed asset management process maturity timeline for inland navigation is illustrated in the figure [on the following page], which also generally serves as the outline for this brief summary “status description.”

Starting with the development of the FY10 budget in 2008, the Navigation Business Line initiated use of the 5×5 Relative Risk Matrix in the evaluation of O&M [operations and maintenance] work packages for both coastal and inland projects. The 5×5 risk matrix used “condition” and “consequence” descriptions at each of 5 levels, with the measure of project total commodity tonnage being a key factor in estimating consequence. The Inland Marine Transportation System (IMTS) Improvement Report identified a business process review (BPR) to “implement a standardized annual condition assessment process.” As a result, the Corps began the development of what is now the Operational Condition Assessment (OCA) process. The OCA process was not yet completely implemented during the development of the 2010 Capital Projects Business Model (CPBM) so that initiative used the 5×5 condition description at the lock level.

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

As noted in Engineer Circular [EC] No. 11-2-200, “Corps of Engineers Civil Works Direct Program Development Guidance–Fiscal Year 2013” dated 31 March 2011, in FY10, Asset Management developed, trained and deployed the national Operational Condition Assessment (OCA) process in all MSCs with inland and intracoastal navigation. The EC further stated that “consequences of diminished Navigation feature performance are computed for each budget line item that could result in an unscheduled closure . . . and will establish the initial transition from tonnage to economic consequence of unscheduled closure. The economic consequences will be a function of the probability of failure of the components and the economic impacts as determined by the Planning Center of Expertise for Inland Navigation in the Huntington District and calculated from the OCA risk process” (now known as the Operational Risk Assessment [ORA] process). To maintain consistency with the process at that time, the “risk reduction” was correlated with the consequence levels in the 5×5 risk matrix. Concurrent with the development of the OCA and ORA processes the Corps was heavily involved in the National Research Council’s Federal Facilities Council and was invited to present the processes to the Committee on Predicting Outcomes of Investments in Maintenance and Repair of Federal Facilities.

Upon completion of the Predicting Outcomes of Investments in Maintenance and Repair of Federal Facilities report, the Committee conducted a public report dissemination forum and invited two federal agencies whose maintenance budgeting processes best addressed the report’s findings and recommendations—the Department of Energy was one invitee and the Corps Civil Works Asset Management the other.1 Highlights of the Corps presentation (see link in footnote) included the focus on mission critical components (those components for which failure will result in (1) the inability to pass traffic and/or (2) maintain the naviga-

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

tion pool to pass that traffic; the probability of failure of the many components; and the economic impact to the commercial stakeholder (commodity shippers and carriers) for varying durations of outages due to potential failures. Collectively, the Corps risk-informed approach best addresses Recommendations 2, 3, and 6 of the report, which are as follows: corporate approach to mitigating risk which focuses on linking investments to mission and objectives; use risk to inform annual maintenance and use standard methods for gathering and updating data; and focus on collecting mission critical data and information, respectively.

Building on the transition in 2011 from tonnage to economic impact as a consequence in the 5×5 relative risk matrix, in 2013 the Corps codified another transition in Engineering Circular No.11-2-204, the budget development guidance for Fiscal Year 2015.2 In addition to embedding the economic impact risk reduction into the 5×5 consequence category, risk reduction visibility was elevated and explicitly added as a navigation budget performance measure. To that end, Section I.15, Budget Data Submissions for Inland Navigation, stated “condition and risk analytical tool for inland navigation . . . that develops risk buy down performance measures used to rank critical nonroutine navigation budget work packages . . . must be used to develop performance measures for inland navigation critical non-routine maintenance budget packages.” Further, Section II of EC 11-2-204 introduced the strategy for maintenance, in addition to the critical non-routine, stating that “USACE Asset Management has developed an overall USACE Maintenance Management Strategy and a Maintenance Management Improvement Plan (MMIP). The MMIP and its associated implementation plan will provide that corporate maintenance management strategy; help to provide consistent maintenance management policies, processes, practices, and terminology; and begin to align maintenance investments with desired levels of performance.”

In June 2014 the Water Resources Reform and Development Act (WRRDA) was signed into law. Section 2002 of WRRDA 2014

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

required the Secretary of the Army to “develop and submit to Congress a report describing a 20-year program for making capital investments on the inland and intracoastal waterways based on the application of objective, national project selection prioritization criteria.” The Asset Management national condition and risk processes and analytics (OCA and ORA) play a major role in the developing a capital investment strategy by enabling the identification of those projects that have the most mission critical components, that are in the worst condition, with the highest likelihood of failure, that would cause the most economic impact on our stakeholders.

Future. The Corps Asset Management continues to mature, applying lessons learned from the inland navigation processes to other business lines, as well as continuing to evolve the current navigation OCA and ORA processes. Possible future improvements may include the capability for fault-tree analysis, use of utility model theory, and other approaches to ensure investments across the life cycle and the entire portfolio of assets are focused on buying down risk to ensure the Corps continues to deliver project benefits, or value, to the nation.

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

Suggested Citation:"Appendix H: USACE Description of the Status of Implementation of Its Asset Management Program." National Academies of Sciences, Engineering, and Medicine. 2015. Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know. Washington, DC: The National Academies Press. doi: 10.17226/21763.

TRB Special Report 315: Funding and Managing the U.S. Inland Waterways System: What Policy Makers Need to Know explores the role and importance of the federally funded inland waterways system, priorities for future investment, its beneficiaries, and sources of funding.

In recent years, the inland waterways system has transported six to seven percent of all domestic ton-miles of cargo. The system is a small but important component of the national freight system, particularly for bulk commodities. The study committee finds that, in order to ensure efficient use of limited navigation resources, the most critical need for the inland waterways system is a sustainable and well-executed plan for maintaining system reliability and performance. Reliability and performance will depend on placing higher priority on investments in operations and maintenance (O&M). Without a funding strategy that prioritizes system preservation, maintenance may continue to be deferred, which would result in further deterioration and in a less cost effective and less reliable system.

The committee finds that more reliance on a “user-pays” funding strategy for the commercial navigation system is feasible, would generate new revenues for maintenance, and would promote economic efficiency.

The committee suggests that an asset management program focused on economic efficiency, fully implemented and linked to the budgeting process, would help prioritize maintenance spending and ascertain the funding levels required for reliable freight service.

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